By IPS Correspondents
WASHINGTON, Aug 17 2007 (IPS)

The world&#39s rural poor could benefit from a boom in fuel wrung from crops, despite worries that an accompanying surge in food prices could result in more hunger, say environmental and food experts.

But for the poor to share in the bounty of the so-called biofuel revolution, trade and agricultural policies and the practices of the fuel-from-food industry itself must be changed.

Many agricultural commodities have been in a virtual price freefall since the 1970s, with devastating consequences for entire economies. But key prices have bounced back in recent years, in large measure due to the biofuel industry.

"Decades of declining agricultural prices have been reversed thanks to the growing use of biofuels," said Christopher Flavin, president of the Worldwatch Institute. "Farmers in some of the poorest nations have been decimated by U.S. and European subsidies to crops such as corn, cotton, and sugar. Today&#39s higher prices may allow them to sell their crops at a decent price."

Additionally, said Flavin, countries that develop domestic biofuel industries should be able to buy fuel from their own farmers rather than spending scarce hard currency on imported oil, the price of which has tripled in recent years.

Of the world&#39s 47 poorest countries, 38 are net importers of petroleum and 25 import all of their oil.

Jacques Diouf, director general of the UN Food and Agriculture Organisation (FAO), urged U.S. and European Union leaders to lower trade barriers that he said make it uneconomic for developing countries to grow biofuel crops. He also called for small-scale financing to help farmers in poor countries to produce local biofuel.

"Such measures would allow developing countries – which generally have ecosystems and climates more suited to biomass production than industrialised nations and often have ample reserves of land and labour – to use their comparative advantage," Diouf said this week in a published commentary.

Additionally, efforts are needed to ensure that human bellies do not lose out to fuel tanks at harvest time and that the world&#39s remaining forests are not threatened by expanding biofuel cultivation. One-fifth of U.S.-grown corn is turned into fuel, not food; demand for ethanol has seen portions of the Brazilian Amazon fall under the plough.

Worldwatch urges switching from using food crops to other forms of biomass including farm and forestry waste.

"Major agriculture reforms and infrastructure development will be needed to ensure that the increased benefits go to the world&#39s 800 million undernourished people, most of whom live in rural areas," said Flavin.

By the 1980s, malnutrition and abject poverty on once-prosperous sugar plantations like those of Negros Occidental, in the Philippines, came to symbolise the withered prospects of commodity-dependent regions of the developing world.

Only about 10 percent of the world&#39s sugar harvest is being distilled into fuel ethanol, yet the price of sugar already has doubled, according to Lester Brown, president of the private Earth Policy Institute. Grain prices also have risen as more corn – and to a lesser extent, rice and wheat – is converted into fuel.

Regardless of the potential benefits in the long run, the foreseeable future strikes him as grim.

"For the two billion poorest people in the world, many of whom spend half or more of their income on food, rising grain prices can quickly become life threatening," Brown said. "The broader risk is that rising food prices could spread hunger and generate political instability in low-income countries that import grain, such as Indonesia, Egypt, Nigeria, and Mexico."

Josette Sheeran, head of the UN World Food Programme, sounded a similar warning last month, when she said higher commodity prices were affecting her agency&#39s operations.

Worldwatch, in a new book, this week acknowledged those concerns but said the economic benefits eventually should triumph.

"Rising food prices are a hardship for some urban poor, who will need increased assistance from the World Food Programme and other relief efforts," it said.

However, "the central cause of food scarcity is poverty, and seeking food security by driving agricultural prices ever lower will hurt more people than it helps."

Biofuel production doubled between 2000 and 2005, according to the International Energy Agency (IEA), the France-based policy advisor to 26 mostly Western member states. The United States, Europe, and Brazil made nearly 95 percent of the world&#39s biofuel last year. Canada, China, and India produced much of the balance.

U.S. producers rely most heavily on corn for their ethanol, while Brazilians use sugar, and Europeans make biodiesel from rapeseed and other vegetable oils. China and India use mostly sugar, although China also extracts fuel from rice and wheat.

Biofuel powers roughly one percent of global road transport. The IEA expects this share to quadruple by 2030.

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